Visa unveils platform for banks to issue fiat-backed tokens

The Visa Tokenised Asset Platform (VTAP) offers financial institutions the ability to mint, burn, and transfer fiat-backed tokens, including tokenised deposits and stablecoins while experimenting with innovative use cases. Currently, in a test environment, the platform is expected to support live programs next year as banks prepare to launch these services for their customers.

VTAP is designed to enhance the functionality of fiat-backed tokens by integrating them into smart contracts for greater programmability. For instance, banks could automate complex financial processes, such as managing credit lines, by employing smart contracts that release payments once predefined conditions are met. This capability not only streamlines operations but also opens the door to new possibilities for financial services.

A key feature of the platform is its focus on interoperability across multiple blockchains. By utilising a single API connection to VTAP, financial institutions can support a variety of use cases and seamlessly interact with partners and clients across both permissioned and public blockchains. This approach aims to provide banks with the flexibility and connectivity needed to adapt to an increasingly blockchain-driven financial landscape.

Some institutions have already begun testing VTAP in a sandbox environment. These trials include issuing, transferring, and redeeming bank tokens on testnet blockchains, as well as leveraging tokens in conjunction with smart contracts. Such initiatives are laying the groundwork for the broader adoption of tokenised assets within traditional banking systems.

With plans for live pilot programs shortly, the platform represents a significant step forward in integrating blockchain technology into everyday banking operations. By combining the stability of fiat currencies with the programmability of digital assets, VTAP has the potential to transform how banks deliver services and engage with clients in a rapidly evolving financial ecosystem. This development marks a turning point for financial institutions aiming to embrace blockchain technologies and broaden their offerings with innovative financial solutions.